According to James Andrews, senior managing director of Integra Realty Resources, the Caribbean real estate market is once again attracting luxury home buyers, but some islands in the area are still struggling. for sale qatar
Mr. Andrews told WPC News that while many resort-residential projects in the area are still experiencing slow sales, new construction patterns are emerging.
"More upscale properties are being built," he said.
Even all-inclusive resorts are increasingly catering to high-end clients rather than the middle class.
"Previously, Sandals-style operations were targeted toward a relatively inexpensive market, but now Sandals has acquired a property in Grenada that will be a luxury all-inclusive property," he explained.
Overall, Mr. Andrews says, asking rates for second homes in the area have stayed stable during the recession, averaging $1 million for lots and $3 to $5 million for built homes. The properties in the middle and lower price ranges that don't have facilities like a golf course or a marina have been hit the hardest, he said.
The global economic crisis has had varying degrees of impact on various Caribbean islands. Barbados is highly reliant on the European market and has been harmed by the continent's slow recovery, while western Caribbean consumers are 90 to 95 percent from the United States, which has recovered more quickly.
International home buyers profit from residency schemes on islands like St. Kitts and Nevis, he says.
Traditional lenders in the area are still cautious, but developers are beginning to return.
Mr. Andrews explained, "Developers have been waiting for an opportunity to get back into the market and reignite the patterns that were strong prior to the economic downturn."
Baha Mar in the Bahamas, one of the biggest projects in the Caribbean, is scheduled to open in December 2014 with 2,200 rooms in four hotels. The project is being designed by China State Construction America and is being funded by the Export-Import Bank of China.
Despite the activity, a recent IRR study found that sales on many islands are "flat." However, according to IRR, several projects are reporting closed deals:
Based on the last 18 months, the Viceroy Anguilla has registered approximately 6 to 8 sales per year, with average sales prices about $1,000 per square foot.
Since 2008, the Bakers Bay, Abaco, Bahamas, a small island development, has sold 173 of 375 lots, or around 25 per year. Prices range from $1.0 million to $4.0 million, or $27 to $85 per square foot.
Since 2010, the ultra-luxury residential development Oil Nut Bay in Virgin Gorda, British Virgin Islands, has averaged nine sales per year. The resort lots have been priced between $2 million and $13 million, with lots ranging from less than one acre to 17 acres.
The Baha Mar production in the Bahamas has passed the 33% completion mark. In 2012, sales totaled more than $100 million, with deposits on more than 50 of the 307 homes valued between $1.2 million and $12 million.
In 2013, the Reef Atlantis announced 12 completed sales. Over the course of seven years, absorption averages 395, or 56 per year. There are about 100 units left, with prices averaging $1,100 per square foot.
The condominium market on Grand Cayman's Seven Mile Beach is "virtually flat," according to IRR, with 25 sales totaling $25.6 million in the first six months compared to 25 sales totaling $24.9 million in the same timeframe last year. The average price per square foot is $560.
In 2012, there were 20 condo sales on Grace Bay Beach in Providenciales, Turks and Caicos, compared to 12 in 2011. In the first 5.5 months of 2013, there were 18 transactions. Prices per square foot range from $400 to $700.
Despite the lackluster revenue figures, the consultancy sees promising signs for the sector. "Before lenders regain trust in the area," Mr. Andrews said, "mixed-use residential resort projects will have to be financed by unconventional sources like private equities."